Are You Happy with Your Checking Account?

Recently, it seems as though banks are trying their best to squeeze as much money as they can out of consumers. Fees continue to head higher, and account minimums are imposed. In fact, we’ve heard a lot about the demise of the free checking account, and how consumers are a little unhappy about the current landscape.

But are things really that bad?

The reality is that many Americans seem to be reasonably happy with their checking accounts — at least that’s the story according to TD Bank.

TD Bank recently commissioned a survey about Americans’ checking account experience, and the results are reported in the first TD Bank Checking Experience Index. The findings indicate that most Americans are happy with their checking accounts, but that they are keeping a watch on the situation and that they are ready to jump ship if necessary.

While some of the big changes to accounts might be making headlines, many Americans are quietly going about their business, and their existing accounts aren’t changing. However, that doesn’t mean that you shouldn’t be on alert. If you discover that your checking account no longer meets your needs, it can make sense to change things up a bit.

Consumers Mostly Happy with Checking Accounts and Banks

The survey indicates that 83 percent of Americans think that their experience with checking accounts is “excellent” or “very good”. On top of that, the survey reports that 74 percent of respondents think that bank hours are convenient. Another convenience factor, location and ATM offerings, ranked high with 70 percent of consumers considering accessibility “excellent” or “very good”.

Americans prize convenience, and that means that they like to be able to access their money when it fits their schedules. Online banking and the presence of ATMs help Americans feel secure about their abilities. Also, the fact that fewer Americans use cash is probably another factor. Bank hours don’t matter as much if many of us aren’t even concerned about whether or not we have cash in our wallets.

For the most part, Americans are complacent about their checking accounts — as long as they aren’t charged fees. The TD survey can also serve as a warning to banks to be careful about what types of fees they decide to charge their customers.

Consumers, Banks, and Fees

Even though many consumers appear to be happy with their banking situations, that could change quickly if fees are added to the picture. The TD survey indicates that only 10 percent of respondents expect to pay for their checking accounts. That means that 90 percent of consumers likely expect free checking. So, even as we see headlines about another bank that has gotten rid of free checking, it’s something that Americans expect to remain a part of the landscape, or they could switch financial institutions.

The types of fees charged can be telling as well. According to the survey, 38 percent of consumers find non-bank ATM fees the most frustrating fees they have to pay. I was a bit surprised at this, since overdraft fees (the second-most frustrating fee, at 27 percent) are usually more expensive and can be exceptionally onerous. However, this is a case where there are regional outliers. Those in Miami, Florida consider overdraft fees (43 percent) as the most frustrating fees to pay.

For consumers that don’t overdraw their accounts, I can see how ATM fees can be frustrating. After all, it’s your money, and it seems hard that you have to pay to access it. Many people understand that overdrawing an account will result in a fee.

Not very many consumers find the requirement to carry an average balance to avoid a monthly fee that frustrating, with only 13 percent citing that as the most frustrating fee. TD reports that the average balance required to avoid a monthly fee is $950. Apparently a majority of consumers feel as though that size of a balance is feasible. Higher minimums might change the picture. Additionally, many banks waive the minimums if you deposit a certain amount of money, or engage in a certain number of debit or credit transactions. Being able to waive the fees can mollify consumers who wouldn’t normally be happy with a minimum balance.

Finally, there is a fairly good-sized chunk of the market willing to switch banks with the imposition of fees. The TD survey indicates that 36 percent of respondents would be willing to switch banks in order to avoid fees. But that attitude might vary with region. Bostonians seem especially concerned with fees, with 51 percent of them saying that they would switch banks to avoid paying checking account fees.

One solution that many consumers have been considering in recent years has been the credit union. Credit unions operate under different rules, and often charge fewer fees. It’s easier to find a free checking account at a credit union than it is at a bank. Smaller community banks are also gaining in popularity. Some consumers feel that they are more likely to avoid fees and even get better treatment in general if they stick with a smaller regional or community bank.

Overall, it still appears as though consumers are reasonably happy with their checking account options. However, that doesn’t mean that banks can sit back and coast. Consumers also appear to be paying attention; they are ready and willing to switch things up if it looks like a bank is no longer a good deal.